Houston Real Estate expert Bill Edge predicts job growth, combined with low inventory make this the best time to sell in Houston. Multi Family, and commercial Real estate will remain strong.
Job Growth is the key to Houston’s rapid growth
The Texas Workforce Commission reports Houston gained 362,000 new jobs in the past four years, giving many would-be homeowners the income to purchase a home. The Greater Houston Partnership reports Houston accounted for 32.1 percent of the state’s new jobs last year. Houston’s robust economy will continue to attract people relocating from areas whose economy is faltering.
Multi-Family apartment building will be strong
The rapid job growth in Houston has spurred the demand for rental property. Builders such as Camden, Tramell Crow, Gerald Hines, Martin Fein, and The Hanover Company are building multi story buildings with granite countertops and high ceilings. We are seeing the demise of the three bedroom apartment and the increase of efficiency apartments with 500 square feet of living space. Houston is a builders dream with their being very little rental housing in midtown or near downtown.
Inventory will remain low
Houston builders built 49,470 homes in 2006 and less than 20,000 in 2009 to 2011. When you take into consideration homes fall down, burn, or replaced by new homes. The shortage becomes even more acute. The population is increasing much faster than the home inventory. If multi-family builders had not upped their production there would be an acute housing shortage in the Houston area. It is going to take time for the new home builders to catch up with demand.
The suburbs will become urban
American cities are growing faster than the suburbs according to the US Census. The Woodlands, Katy and Sugarland are looking more and more like Houston. They are becoming more walkable, with cafes, green spaces, galleries, and mixed used places.
Roads will become more congested
Anyone who has driven in Houston will tell you traffic has increased. According to the National Association of Realtors Seventy Five percent of home buyers say commuting costs are important. The only major roadway being built is the Grand Parkway which serves the counties surrounding Houston. I45 south and north are listed in the top 10 congested roads in Texas by the state highway department. Houston’s solution to the transportation problem is to build rail a north / south rail which will serve very few people. For the first time in 30 years according to the Kinder Institute of Rice University more people want to live inside the loop than outside the Loop. We are seeing people who live in the suburbs buy condo’s in downtown Houston to avoid the drive. The driving distance to work will continue to be a key decision maker in where to live.
Builders will face a shortage of lots and workers
The building industry dropped from 49,470 home starts in 2006 to under 20,000 from 2009 to 2011. That is a lot of electricians, brick layers, painters etc. that had to find jobs elsewhere. Many of these people relocated to cities in the Northeast and Midwest where weather created disasters were causing construction needs. Home sale have been escalating in Houston for the last 3 years but the labor shortage is causing delays in construction. There are only so many vacant lots in Inner Loop Houston. With the housing demand going up builders are hard pressed to find enough lots to satisfy demand.
Commercial real estate will continue to grow
The Greater Houston Partnership said, “The Houston office market closed the year having absorbed 4.8 million square feet of office space, according to CBRE. The market has enjoyed 13 consecutive quarters of positive absorption. At year’s end, more than 14.2 million square feet of office space in 41 buildings was un-der construction, of which a healthy 70 per-cent was preleased, notes CBRE.”
Flood zones are more important than ever
The Houston area is flat and not that high above sea level. Water from surrounding counties travels through Houston on its way to the Gulf of Mexico. Our streets are designed to act as canals during rainstorms. It is only natural that certain areas of Houston will flood during heavy rains. The National and State Flood insurance programs are broke from heavy losses occurred during the last 10 years. These programs have been subsidizing flood insurance rates for years. Flood insurance rates have greatly increased and will most likely increase higher. Buyers are going to start avoiding purchasing homes in areas with high flood insurance rates.
The Seller’s Market will continue
Houston area realtors sold 88,059 homes in 2013 an increase of 18.8% from 2012 according to the Houston Association of Realtors The inventory in Houston is down to 2.6 months, with 6 months inventory being what is considered an ideal market. There simply are not enough homes on the market to satisfy demand. Buyers are finding the competition is driving up the prices of homes.
The Eastside will continue to see rapid growth
This former warehouse district has been experiencing a rapid regrowth. The EaDo area is minutes from downtown, Minute Maid Park, and the Medical Center. The Houston Business Guide describes “EaDo, as offering a diverse mix of ethnic grocery marts and restaurants, bars and nightclubs and art galleries. Located within walking distance of the George R. Brown Convention Center and the heart of Downtown Houston, this vibrant neighborhood continues to grow and attract new residents and business tenants. The new Dynamo soccer stadium anchors additional parks, restaurants and nightlife and a new MetroRail line will improve connectivity to the neighborhood.”
Have a question about a property? Want to learn more about Houston Real Estate? Ready to tour your favorite homes today? Contact Bill Edge now.